Are Sleeping Pods Even Legal?

Composite Photo: Brownstone / Google Earth

San Francisco City Hall seems eager to embrace the latest tech start up in the housing arena: sleeping pods. But in the rush to concoct yet another housing-for-profit scheme (and perhaps the most dystopian one to date), it seems everyone may have missed a state law that could ban the practice altogether.

Sleeping pods as an idea for a more “affordable” place to sleep in San Francisco has been all the rage since 2024, and the media can't get enough of it. Perhaps it’s the vision of Kramer’s dresser drawer beds for visitors in lieu of a hotel, or perhaps it just fits in well with a dystopian tech vision for San Francisco. Regardless, say the word and an avalanche of media coverage will follow. 

In October 2024, the City approved Brownstone Shared Housing’s project for 30 sleeping pods in a former bank building on Mint plaza. The pods were described as “small cubic spaces with mattresses stacked across two levels — for $700 per month.”

A year later, the startup was hit with an eviction lawsuit for not paying rent, but it seems they’ve resolved that. Then, in September 2025, the Chronicle reported that “Brownstone is no longer interested in leasing buildings for its San Francisco locations, including 12 Mint Plaza. Instead, the company plans to switch to a franchise model, acting as an adviser for owners of vacant or underutilized downtown properties who want to convert them into sleeping pods. ...Brownstone would collect a percentage of future rental income from pods locations that it helps to launch.”

Now, the startup is reportedly seeking to expand. Brownstone purchased a building on Market street to create a 400-bed megadorm.

One lesson I learned early in my legal career is to go look at statutes, rather than just relying on how others are interpreting them. Just because everyone is acting like something is legal doesn’t mean it is. This seems to be the case with sleeping pods.  

Meet California Civil Code Section 1950.

Section 1950 prohibits what’s known as “double letting.” The idea is that if a landlord rents out a room to someone, the person is entitled to the entire room. A landlord cannot then rent the room, or any part of it, to another person.

The statute reads:

One who hires part of a room for a dwelling is entitled to the whole of the room, notwithstanding any agreement to the contrary; and if a landlord lets a room as a dwelling for more than one family, the person to whom he first lets any part of it is entitled to the possession of the whole room for the term agreed upon, and every tenant in the building, under the same landlord, is relieved from all obligation to pay rent to him while such double letting of any room continues. (Civil Code §1950)

So imagine the Brownstone startup puts 50 pods in one big room. Once they rent pod #1, that person appears to have the right to the entire room. Renting pods #2 through #50 could violate Section 1950. If they do, they are double letting, and “every tenant in the building, under the same landlord” could withhold rent for as long as the “double letting” continues.

It’s unclear how Brownstone thinks they will get around this. Maybe their lawyers didn’t catch it. Or maybe they did, but like so many tech startups, they figured they could violate the law and never get in trouble. The difference here is that while tech-backed politicians are unlikely to intervene, Brownstone’s business model could easily collapse if pod renters (or even any tenant in the building) sues for rent back because of Section 1950.

It will be interesting if this issue comes up when Brownstone seeks a permit to convert a building to sleeping pods.  It will also be worth noting if the SF City Attorney takes action. Brownstone has been public about its business model, and the City Attorney could file an unfair business practice case against the startup.

We live in one of the wealthiest cities on the planet, yet we are at the point where people may need to sleep in pods to afford the city. Few things more clearly show the utter failure of the for-profit housing market than the emergence of this business model. This is where the hyper-commodification of homes leads. We need to change course, invest in affordable homes and ramp up a massive social housing program. In the meantime, whether people sleep in tiny pods so investors can make more money may well depend not on what minimum housing standards should be, but on whether Courts will apply the law to this latest business scheme. Stay tuned.